What Can Europe Learn from Latin America’s Experience of Austerity?

Dr Barry Cannon, Prof Eduardo Silva, Dr David Begg, Dr Mary Murhpy
Wednesday, May 6, 2015 - 16:00

The experiences of Latin America during times of economic crisis should serve as a cautionary tale for European policy makers, warned Eduardo Silva, Professor of Political Science at Tulane University in New Orleans, speaking at Maynooth University.
Professor Silva said, “In Latin America, over time, growing economic, social, and political exclusion from tenuous recoveries provided motivation for protest,” noting that, “links were subsequently forged between heterogeneous groups, opening space for radical populist parties.”
He delivered the remarks at the inaugural Maynooth University Visiting Scholar Lecture Series, followed by responses from Dr Mary Murphy, Maynooth University Department of Sociology and Dr David Begg, Alumnus and former General Secretary of the Irish Congress of Trade Unions.
“Since the financial crisis began,” Prof Silva said, “the economically stronger nations of Europe have been dictating harsh fiscal reforms onto those countries whose economies are struggling. Deep fiscal and monetary crises, we have been told, leave no choice but to adopt such policies, and once wayward debtor countries get their economic houses in order, they will grow again. This argument has served as the rationale behind the implementation of austerity programmes throughout Europe. This situation evokes a strong sense of déjà vu among the Latin Americans who experienced the imposition of a similar policy package from the 1970s right up until the early 2000s.”
He pointed specifically to the lessons that the Latin American experience holds for countries on the fringes of Europe, referencing the dangers of adopting policies that favour the markets over the public good. In Latin America, he said, large scale exclusion from recoveries provided motivation for protest, with horizontal links between heterogeneous groups forming, leading to cycles of large-scale protests that opened space for radical populist parties to take office.
“Similar movements are beginning to form in the periphery of Europe,” Prof Silva noted, “especially debtor movements, anti-water commodification, farmer movements, public service preservation movements, alternative environmental movements, and urban squatter movements. These movements remain fragmented at present. However, the longer that people continue to be excluded from the recovery the more likely it is that activists will learn to frame problems and solutions in ways that bring individuals from different walks of life under the same banner.”
He said the example of Latin America testifies to the dangers of political consensus when it comes to the implementation of austerity policies. Where this is the case, voters quickly become disenfranchised with established political parties and veer towards the emerging parties at the extreme ends of the spectrum. This, in addition to recurring economic crises, leads to a high probability of a turbulent reactive phase.
Dr Mary Murphy responded that while there are lessons to be learned from the experience of Latin America, we have to be careful distilling those lessons into a different European context.  “Over the Irish crisis we have seen attempts on behalf of Irish civil society to frame new alternatives and form new alliances. While these have not yet had significant impact, the Latin American experience shows us that such political adjustment takes time, and progress towards building a new politics of hope needs to be evaluated over decades rather than years.”  
Dr David Begg spoke about a significant crisis of European democracy. “One of the ways we can judge whether there has been meaningful adjustment of European markets to meet the needs of European society is the reform of the European Central Bank, so that it not only controls inflation but also promotes full employment and societal well being.”
The Maynooth University Visiting Scholar Lecture Series is designed with the dual purpose of building international research collaboration between distinguished international scholars and the academic community of Maynooth University, and contributing ideas and new knowledge to public debate in Ireland.